Type 2 diabetes (T2DM) and obesity are increasing dramatically in pediatric populations, forecasting the development of complications at younger ages, and increased morbidity and mortality in the US population. The proposed research plan will be the first to examine whether the intramyocellular lipid (IMCL) deposition or decreased exercise capacity associated with T2DM in adults already occurs in pediatric T2DM, the underlying mechanism and interrelation of such defects, and how traditional insulin sensitization techniques affect the defects. The hypothesis is that teens with increasing insulin resistance will have increased IMCL (explainable by insulin's selectively impaired PI3-kinase signaling, yet normal Erk signaling, resulting in increased skeletal muscle SREBP-1, yet decreased adipose SREBP-1), decreasing exercise capacity (explainable by endothelial dysfunction, diastolic dysfunction and increased IMCL), and greatest improvement in exercise capacity with interventions that improve both insulin resistance and IMCL deposition. To explore the hypothesis in vivo, we will address the following Specific Aims. 1: Understand the impact of T2DM upon skeletal muscle lipid distribution and SREBP-1 regulation, in comparison to normal adolescents and adolescents with obesity but without T2DM. 2: Determine the baseline exercise capacity and its correlates in adolescents with T2DM in comparison to normal adolescents and adolescents with obesity but without T2DM. 3: Examine the impact of three distinct therapeutic interventions directed at improvement of insulin sensitivity upon responses in SREBP-1 regulation and exercise function, in adolescents with T2DM With the combination of basic science and clinical research training, a clinical research certificate, outstanding mentors in insulin signaling, clinical diabetes research and exercise physiology, I am in an ideal position to be successful. The K-23 application will help me reach my long-term goal of being an independent investigator in the field of pediatric insulin resistance and type 2 diabetes.